Energy scholars assess Lex Petrolea in UHLC discussion

Complex international system of laws governs petroleum transactions.

Visiting Assistant Professor Julian Cardenas Garcia of the Law Center makes a point while Dr. Alfredo De Jesus, a lecturer at the University of Versailles and the University of Paris XI, listens during a discussion about transnational petroleum transactions and the law.

April 26, 2013 – Two international energy scholars explored the state of Lex Petrolea in the ever-evolving world of transnational petroleum transactions during a discussion this week at the University of Houston Law Center.

Visiting Assistant Professor Julian Cardenas Garcia, an Andrews Kurth Energy Scholar at the Law Center, and Dr. Alfredo De Jesus, a lecturer at the University of Versailles and the University of Paris XI, analyzed legal theory and regulation as applied to global oil and gas transactions and offshore development.

In Wednesday's discussion titled, "New Trends in Transnational Petroleum Transactions," De Jesus defined Lex Petrolea as not just "a bunch of rules," but an international system of laws comprising a number of factors to deal with a truly global economy. He cited four main elements contributing to the makeup of the new system: the worldwide economy; legal theory, the merger of "hard" law and "soft" law in the manner in which laws are created and applied; interpretation of complex contracts that have evolved into "relational" agreements; and conflicts between international law and national law with varying conventions, rules, principles, and applications.

De Jesus noted a paradigm shift from an international economy to a multi-national in the 1960s to an economy starting in the '80s in which third parties invest in companies in multiple nations spanning the globe.

Cardenas cited the importance of laws and regulations governing worldwide offshore petroleum developments with serious consequences for individual companies, the industry as a whole, countries, and the environment.

Transnational law is increasingly divided into specific sectors, he said. Lex Petrolea is one, with others that can be called Lex Sportiva, Lex Constructiva, and Lex Mercatoria. Each deals with varying legal systems, jurisdictional disputes and others that arise in transnational transactions.

"We live in a world today that is now divided into sectors," he told students and visitors in the lunch hour presentation. "You belong to a sector more than you belong to a nationality. It's hard for us to write off the concept of nationality to individuals, but it's not hard for industry."

Arbitration, best practice standards, municipal and international law are used in the form of a network of transnational rules that govern transnational petroleum transactions. . Given the phenomenon of regulatory inflation in the petroleum industry, Cardenas concluded, "We live in the Era of Sources of Law."